David Farrell, an analyst from Jefferies, maintained the Buy rating on Chemring (CHG – Research Report). The associated price target is p530.00.
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David Farrell has given his Buy rating due to a combination of factors that indicate significant growth potential for Chemring. The company has announced progress in its joint feasibility study with the Norwegian government for a new energetics production facility. This advancement to the ‘concept select’ phase is a crucial step towards expanding their Energetics business, with the facility’s size and commercial arrangements to be finalized next year.
Furthermore, Chemring’s existing capacity expansion is set to be fully operational by 2028, increasing production capacity by 275% compared to 2023 levels. The potential new facility in Norway is expected to match or exceed this expanded capacity, and Chemring is also planning more comprehensive operations in Germany and a new plant in the UK. These strategic developments are likely to bolster Chemring’s growth trajectory into the early 2030s, supporting the Buy rating.